Despite a recommendation from a strongly worded grand jury report, the Santa Barbara County Board of Supervisors on Tuesday rejected a proposal to audit organizations that receive more than $100,000 from the county.
The 18-page grand jury report, called “A Failure of Oversight,” took the county of Santa Barbara to task for failing to adequately monitor millions of dollars in loans given to the Lompoc Housing and Community Development Corporation, the biggest provider of affordable housing in and around the city of Lompoc.
Released in June, the report blamed the County Housing and Community Development Department, the city of Lompoc and the Lompoc Redevelopment Agency, for a chronic lack of oversight regarding series after series of non-compliance issues on the part of the agency, which has since been reopened under new management, though many residents were displaced.
“The most immediate victims of the fall of LHCDC are the homeless who were thrown out of the shelters, the low-income tenants whose homes are in disrepair and the residents of Lompoc who have to suffer the resulting blight,” the grand jury report stated. “Taxpayers are also victims. Many of the loans given to LHCDC will have to be repaid by the county of Santa Barbara or the city of Lompoc,” it continued.
Over the years, the LHCDC had received several warning letters over non-compliance issues, related to such problems as overcharging on its rent for affordable units, failing to upkeep the property, and failing to provide financial records and missed loan payments. The county of Santa Barbara, as the lead agency in the federal HOME program, sunk $2.89 million into LHCDC properties and faces a potential liability of $1.4 million under a recallable loan provision, the report noted.
“If attention had been paid and LHCDC had been forced to better manage its affairs in a timely fashion, low-income renters in Lompoc would have been much better served, and taxpayers would have been saved millions,” the report concluded.
At its latest regular meeting, the Board of Supervisors supported the finding that loan contracts give the county authority to audit the records of organizations. But it rejected the idea of requiring that the auditor-controller conduct annual audits of groups that receive county funds in excess of $100,000, because it would be time-consuming and too costly. According to County Executive Officer Chandra Wallar, the extra audits would require nine to 10 new full-time auditors.
Fourth District Supervisor Joni Gray, whose law firm represented the floundering non-profit group, recused herself from the discussion. The grand jury report had noted that while Gray was voting on matters that involved LHCDC, her firm had been receiving legal fees from LHCDC. Moreover, her executive assistant was president of the LHCDC board.
“I never felt I had a conflict, but to be clear, I don’t want to step into the middle of it until it’s resolved,” Gray stated before leaving the dais.
County auditor-controller Bob Geis urged the board to reject the grand jury’s recommendations, noting that there are more than 365 agencies that receive in excess of $100,000 per year from the county. The grand jury had recommended that his department audit organizations and charge those that had the money to pay for them. To defray expenses, Geis suggested that the board instead perform annual reviews on a sample of organizations.
Wallar told the board that individual departments should monitor contracts and that it would be unreasonable for the auditor-controller department to monitor everything. “When it’s egregious enough, have Geis’s folks come in,” she said. She also informed supervisors that the county is creating an internal contract compliance policy committee to help departments manage contracts and improve accountability and efficiency.
Also on Tuesday, supervisors responded to a grand jury report that concluded CARES Crisis Residential North, a 12-bed, post-crisis residential facility in Santa Maria, is underused. This baffled the grand jury, as well as supervisors, given that there has been a growing need for mental health support. The center, which opened in March 2008, provides short-term transitional support for patients recovering from mental health issues.
The grand jury learned that during the past few years, the annual average occupancy of the facility has ranged from 7 to 8.6 beds per day. The center must remain open even if only one bed is occupied, incurring a fixed cost to the county.
One reason for the underuse of the facility is the absence of public outreach on the part of the Department of Alcohol, Drug and Mental Health Services (ADMHS), according to the report. Another issue is that emergency room physicians are reluctant to admit a patient with no mental or medical history to the crisis center.
As a licensed social rehabilitation facility, CARES requires that admitted patients have a history of medical and mental conditions. But the facility’s regular physicians are only able to survey new patients during regular business hours, and not during evenings or weekends, according to ADMHS director Ann Detrick. She said her department is trying to create an electronic health records system that can be used by on-call psychiatrists who can assist in signing the evaluation forms and sending them to physicians.
The board also learned that an outreach program is already being implemented and will be concluded by the end of August. It includes coordinating with the probation and sheriff’s departments, among other entities, to help newly released inmates with mental and medical illnesses.
Farr said she was surprised that CARES was underused “given the incredible need I hear all the time throughout this county.”
The grand jury recommended that ADMHS coordinate with the San Luis Obispo County Psychiatric Health Facility to help fill beds – something supervisors Carbajal and Farr found objectionable.
“I don’t want us to start outreaching to San Luis Obispo, and then filling it with their residents before we know that, in fact, we don’t have the need,” Carbajal said. “I’m not an expert in this area, but I’d venture to say we have all the need in the world.”
Finally, the board awarded a $902,000 contract to the Diani Building Corp. for construction of a 2,000-square-foot expansion to Santa Maria’s Betteravia Government Center.
The contract needs approval from project manager John Green. Construction could start in September and finish in May. The 14,661-square-foot building houses the supervisors’ hearing room and offices for the auditor-controller; clerk-recorder; elections; treasurer-tax collector; Veterans Administration and the 4th and 5th District supervisor officers.
If approved, the renovation project would include a new lobby, men’s and women’s restrooms, county television office and storage space for hearing room equipment. The contract also includes minimal renovation to the existing hearing room, change the entryway, create more seating and improve overall circulation.
The board’s hearing room is oftentimes “at or near capacity during board proceedings,” the county staff report read. “Also, the building’s main lobby space is inadequate to current occupancy standards.”
Diani was the second-lowest bidder of five others. The highest bid was for $1.28 million; the average, $1 million. The bid was at first awarded to K.J. Cain Inc. but was later rejected when county staff learned the submitted application failed to list fire alarm or fire protection contracts, which effectively lowered the amount of their bid.